Developer's ambitions annoy some Moreno Valley leaders

This story has been updated to correct information about a group
that sued over a limited building permit issued for the Skechers
warehouse. The Moreno Valley Citizens for Lawful Government filed
the lawsuit.

Iddo Benzeevi won't say where he lives in Moreno Valley and
doesn't provide many specifics on his Highland Fairview Properties
company and its past projects.

"I'm private," he said in an interview earlier this summer.

Despite that reluctance, the developer in recent years has
become one of Moreno Valley's most prominent, influential and
controversial business and political leaders.

Highland Fairview is developing the 1.8 million-square-foot
Skechers distribution center in the city's east end that could
bring more than 1,000 jobs to Moreno Valley.

Benzeevi advocated renaming the eastern section of the city
Rancho Belago -- and the City Council agreed -- in the hopes of
attracting residents and businesses. When the economy rebounds, he
plans a massive housing development there.

He has thrust himself into city politics, funneling more than
$425,500 into Inland-area elections since 2005. He regularly
attends City Council meetings and was actively involved in Moreno
Valley's now-stalled search for a new city manager.

Supporters call him a man of integrity and describe him as
visionary and genuine. His critics see a demanding developer who
has a thin track record, oversells projects and uses money to get
what he wants.

It's no secret that Benzeevi has ruffled feathers along the
way.

Some residents opposed the location of the Skechers project,
since the property was not zoned for buildings that large -- more
than a half-mile long. Others accuse a majority of the City Council
of giving Benzeevi special treatment.

Three of the five City Council members consistently support
Benzeevi. The three -- Richard Stewart, Jesse Molina and William
Batey -- handed Highland Fairview a limited building permit for
Skechers, despite city staff's contention that such a move was
against city law, records show. In July, they called a special
meeting to handle another Benzeevi request.

Benzeevi has clashed with city staff over the Skechers
development, records show, and pushed them to move more quickly on
granting him required permit approvals.

His upscale Aquabella development in Moreno Valley is on hold.
And Benzeevi two decades ago was chosen to develop the former
Norton Air Force Base in San Bernardino but ultimately was
replaced.

Asked in an interview to name developments he has finished,
Benzeevi talked in generalities about his company's focus.

He said he is working to improve the city he now calls home. His
critics are a vocal minority, he said.

The Skechers project already has created as many as 700
construction jobs and once complete will put Moreno Valley on the
map, Benzeevi said.

"Skechers as a company already is doing well," he said. "It is a
global brand."

Track Record Unclear

The 50-year-old, Israeli-born Benzeevi has been in Southern
California and acquiring property in the region for the past 30
years.

In 1990, Benzeevi began putting together a potential team to
redevelop the former Norton and bring back some of the 10,000 jobs
that would ultimately vanish when the base closed in 1994.

Local officials at the time said not much was known about
Benzeevi and expressed concerns about his track record, according
to published reports. Even then he was reluctant to talk about
himself.

He had difficulty putting together the deal to revamp Norton,
and local officials rejected his proposals over concerns about
financing.

Benzeevi said he doesn't regret his work at Norton.

"It was a valuable experience," he said recently. "I met some
phenomenal people."

In Moreno Valley, his past projects also have been a sticking
point for Benzeevi in recent years. There is little evidence that
Benzeevi has successfully developed many commercial or residential
projects.

When the city planning commission debated the Skechers project
in January 2009, commission member Douglas Merkt questioned
Benzeevi on the subject.

Benzeevi replied that his company has spent more than $100
million buying property in Moreno Valley and pointed to his
Aquabella development, a 2,900-home upscale adult community,
according to planning commission minutes.

Work began on Aquabella in 2007 but has stalled because of the
housing bust.

Merkt pressed Benzeevi, again asking about what projects he has
completed.

"OK, let me just say that we're trying very, very hard for years
to get to a point where we can pull the permits so we can get to
the business of building," Benzeevi said, according to minutes of
the meeting.

Land Owner

A long resume or not, Benzeevi's friends and business partners
say he is fair and honest.

John Ohanian, a Yucaipa resident and owner of Oak Valley
Partners real estate development company, said he has known
Benzeevi for 25 years.

Ohanian said they developed a small office condo project
together in Orange County.

"Of all the partners I've worked with, he's the most fair, very
honest, sees things as black or white," Ohanian said.

Another friend, Moreno Valley real estate broker Jerry Stephens,
said Benzeevi probably owns three-quarters of the developable land
in the community. A review of property records shows two of
Benzeevi's companies combined own more than 1,000 acres in and
around Moreno Valley.

Stephens contributed $100,000 in 2008 to help defeat former
Moreno Valley council members Charles White and Frank West, two
critical voices on Skechers.

Stephens said by no means is the in-limbo Aquabella a
failure.

"Why build out a project when you can't sell the homes?"
Stephens said. "He's just waiting."

But Deanna Reeder, a Moreno Valley resident and activist, said
she believes Benzeevi's money holds a lot of sway.

"He is soft-spoken and very polite when you talk to him," Reeder
said. "But if he wants something, he tends to get it whether anyone
else thinks it's reasonable or not. I think he uses his money."

Reeder, who regularly attends council meetings, said people hang
on Benzeevi's every word.

"Some people will do anything he wants unquestioningly," she
said.

White, the former councilman, said Benzeevi gets ahead of
himself and says whatever is needed to get a project approved.
White lost his council seat in 2008 in part due to spending by the
Moreno Valley Taxpayers Association, a recipient of more than
$200,000 in Benzeevi campaign contributions.

"He says everything to get him through," White said of Benzeevi.
"He hasn't, as far as I know, built a thing here in the city of
Moreno Valley. He is looking out for Mr. Benzeevi and not the
city."

Skechers

The new North American distribution hub for shoemaker Skechers
USA sits south of Highway 60 along the future Eucalyptus Avenue
between Redlands Boulevard and Theodore Street. The company has
signed a 20-year, $225 million lease with Highland Fairview.

The city's planning commission voted 4-2 in January 2009 to deny
the project, since it didn't fit with the current general plan for
that area of Moreno Valley. A month later, the council unanimously
reversed the commission's decision.

The concrete slab already is poured for the building, which will
stretch more than a half-mile in length and be wider than two
football fields.

Construction crews this week worked on assembling the
pre-fabricated walls for the warehouse and continued building a
1,600-foot flood-control channel to divert storm water from north
of Highway 60.

"We organize well," Benzeevi said. "When we go, we go full
speed."

That push for speed has resulted in tension among Highland
Fairview, city planners and Mayor Bonnie Flickinger and
Councilwoman Robin Hastings, city records show.

Flickinger voted for the Skechers project and said she hopes it
brings jobs to the city.

"Iddo has a great vision of things he'd like to do. I wish him
good luck," said Flickinger, who is seeking re-election in
November. "I really want to see this built. I want to see the jobs.
I want to see (Skechers) come to fruition. But I'm not willing to
bend the rules."

Within two months of the council's initial approval last year,
Benzeevi requested a host of changes to his project, asking that
conditions such as landscaping along Highway 60 and multi-use
trails -- as required by the city's General Plan -- be removed or
modified.

Benzeevi also has requested that $500,000 paid to the Moreno
Valley Unified School District to help fund the search for a new
school site be used to cover his development fees. The district
board, which had eyed sites near Skechers, voted in July not to
apply the money to Benzeevi's development fee obligation.

Some residents complained about Benzeevi asking for relief on
the conditions he agreed to when the city first approved the
Skechers site.

Kim Nelson, a member of the city's trails board, in an e-mail to
the city asked that Benzeevi comply with the project's
conditions.

Benzeevi already has received "numerous accommodations to make
it easier for him to bring this project to Moreno Valley," Nelson
wrote.

Conflicts

By the start of this year, Moreno Valley's interim city manager,
William Bopf, began playing a bigger role in overseeing the
Skechers project.

In June, Highland Fairview wanted to obtain a building permit to
begin pouring the concrete for the building's foundations and
walls.

Before the city could issue one, though, the company needed a
final tract map. The property was separated into nine parcels and
would need to first be legally combined into one.

Bopf in a June 8 e-mail to the council said it would be against
state law and the municipal code to grant the building permit
without the final map.

On June 22, the council in a 3-2 vote issued Highland Fairview
the limited building permit, despite staff's recommendations to the
contrary. The Moreno Valley Citizens for Lawful Government filed a
lawsuit over the issue. A judge last month declined the group's
request for a temporary restraining order to block the building's
construction.

At the same time, Highland Fairview peppered the city with
requests for approval on sewer and flood control improvements.
Benzeevi wanted the city's staff to handle his requests more
quickly.

For instance, on June 21, Benzeevi sent a letter to the council
asking that they take emergency action to place a Redlands
Boulevard sewer project on the next day's agenda.

Bopf responded with a memo to the council expressing his
frustration over the matter.

"I am writing this e-mail realizing that it could be come
public; hence, I will include nothing that I would not repeat in
public," Bopf wrote.

The city's staff has had to "revise almost every document they
(Highland Fairview) submitted," Bopf wrote. "In spite of this Staff
is often criticized by HF.

"I will not allow this to go unchallenged. If HF publicly
demeans the Staff I will respond publicly."

Bopf said if the council did not take the emergency action, the
sewer approval would appear council's July 13 agenda.

At the June 22 meeting, Stewart said the matter was critical,
since Highland Fairview was ready to construct the sewer
improvements. A four-fifths vote was needed to place the item on
the agenda without violating the state's open-meetings law.

Instead, a special July 6 meeting was held to approve the sewer
project.

Just a week after Highland Fairview's request for emergency
action, the company again asked the city to place items on the July
13 council agenda, even though it was past the city's June 17
deadline to do so, city records show.

"Please note that the City does not even have most of the
documents that accompany HF's request. I will point out that most
documents we receive from HF have to be reviewed, revised, and sent
back to HF. They almost always provide their own non-standard
version of the documents," Bopf wrote in a memo titled "Highland
Fairview's (HF) Untimely Requests."

"Even if HF submits the documents in acceptable form Staff
review is necessary, and Staff reports have to be written. ... To
even accomplish HF's request will require almost everyone involved
to work overtime to respond to their requests."

Bopf wrote that the council could hold a special meeting for
July 20 or July 27 to deal with the issues.

In an e-mail to Flickinger, Hastings, whose district includes
the Skechers site, said she was opposed to a special meeting since
she would be on vacation.

"I also do not support the continued 'special treatment' for
Highland Fairview. I have no reasonable expectation that Highland
Fairview will meet future deadlines and since the City Manager sees
no urgency involved in these requests, I do not support moving in
that direction," Hastings wrote.

"Additionally, in light of the continued favoritism being shown
HF by others on the Council, I see no reason to sign waivers
allowing a meeting to be held in my absence."

'He Can Wear You Down'

Benzeevi said in an interview this week that he never expected
so much difficulty once the council gave its initial approval to
the Skechers building.

He said Highland Fairview is spending tens of millions on fees
to the city for a project that will create jobs. Unlike other
cities that provide financial incentives to attract business,
Benzeevi said he hasn't received city money.

Benzeevi said he had high expectations for getting the project
through the approval process.

"The rest is history," he said, raising his arms and shrugging
his shoulders.

"Good intentioned people, most of them," he said of city staff.
"Unfortunately, you can't live in your own little town and do
business as usual. You have to be super-competitive."

Time is critical, he said.

"You never want to let time go by," Benzeevi said. "It's the
only commodity that is irreplaceable."

Benzeevi said the city is not equipped to handle design
sequencing, a process where construction and various approvals are
done simultaneously.

Planning Commissioner Michael Geller, a Skechers supporter,
agreed. Geller heads the Moreno Valley Taxpayers Association, the
beneficiary of $263,000 in campaign donations from Highland
Fairview in 2008, and is a law partner with Stewart, the city
councilman.

Geller said the city staff should be doing all they can to help
speed the Skechers project, particularly since the city, one of the
epicenters of the foreclosure crisis in the Inland region, doesn't
have much construction going on.

Stewart said the city hasn't handled a project of this size
since the Moreno Valley Mall.

"A lot of policies are in place because they're convenient for
the staff," he said. "We're giving (Benzeevi) some leeway, making
changes in the way we do things."

Stewart said that it's in the city's best interest to accelerate
the construction without cutting any corners.

Does this mean the council is giving Highland Fairview special
treatment and favors?

"Yes," Stewart said. "But is it unreasonable? No. But I'm not in
favor of doing anything for Benzeevi that I wouldn't do for anyone
else."

He said Benzeevi is one of the most intellectual people he has
met, and very tenacious.

So much so, "he can wear you down," Stewart said. "Iddo gets
very emotional when things don't go his way in any particular
moment. He has been frustrated as heck and said things. Then he
calms down."

Since Benzeevi began the permit process in March, things have
moved quickly for a project the size and complexity of Skechers,
Bopf, the interim city manager, said in an interview.

"I think we gave him pretty good service," Bopf said, noting the
process has gone smoother since he began providing weekly e-mails
to Benzeevi.

"The project is important to the city. ... I give him a lot of
credit of doing a project like this in tough economic times."

Staff writer Laurie Lucas contributed to this report.

Reach Duane Gang at 951-368-9547 or dgang@PE.com

Iddo Benzeevi

Age: 50

Residence: Moreno Valley

Company: Highland Fairview Properties

Projects: 1.8 million-square-foot Skechers distribution center,
currently under construction in Moreno Valley; 2,900-home Aquabella
adult community in Moreno Valley, currently on hold